Plan balances energy security and low-carbon goals

Editor's note: China has issued a five-year plan for domestic oil and gas supply, clarifying the development path and priorities of the sector from 2026 to 2030. Xinhua News Agency spoke to Dai Jiaquan, chief economist at the China National Petroleum Corp Economics and Technology Research Institute; Jia Zhao, chief researcher at the China National Offshore Oil Corp Energy Economics Institute; and Hou Hui, a senior researcher at the Sinopec Economics and Development Research Institute, on the significance of the plan. Below are excerpts of the interviews. The views don't necessarily represent those of China Daily.

The plan balances the dual imperatives of energy security and green low-carbon development, laying out a series of key quantitative targets across four main areas.

First, under the plan, China's domestic oil and gas supply is expected to reach 440 million tonnes of oil equivalent by 2030.

China's oil and gas supply structure will be further optimized over the next five years. On the demand side, the country's oil consumption is expected to peak before 2030, whereas natural gas, as a clean low-carbon fossil fuel, is projected to maintain relatively rapid growth throughout the next five years.

Second, the plan also sets the target of adding 20,000 kilometers of long-distance oil and gas pipelines by 2030. This will bring China's total pipeline network to 220,000 km.

Oil and gas infrastructure is a vital pillar for ensuring a secure, stable supply and efficient resource allocation.

On pipeline network development, the plan also proposes multiple initiatives, including consolidating oil and gas corridors, fully completing the nationwide network for oil and gas, advancing the construction of provincial networks and direct-supply pipelines, and coordinating the layout of new business-model pipeline infrastructure.

Third, China aims to raise its natural gas reserves to the equivalent of more than 13 percent of national consumption by 2030 and the unloading capacity of liquefied natural gas receiving terminals to 200 million tons per year, while the import capacity of onshore natural gas pipelines is scheduled to reach 114 billion cubic meters annually.

Fourth, under the plan, the annual carbon dioxide injection from carbon capture and storage, as well as carbon capture, utilization and storage, is projected to reach 10 million tonnes by 2030.

CCS and CCUS are the ultimate backstops for reducing carbon emissions from fossil energy and their development is an inevitable trend. Carbon dioxide flooding can enhance oil recovery rates; by employing CCUS technologies, oil and gas companies can also repurpose underground spaces after extraction to help other emitters with decarbonization needs to store carbon dioxide. CCUS is poised to become a significant growth pole for the oil and gas industry.

Domestic oil and gas enterprises have already made important breakthroughs in CCUS. However, current CCUS development in China still faces cost pressures.

On the other hand, the business model is not yet mature. While carbon dioxide flooding for storage can improve recovery rates, broader commercialization will require a well-functioning carbon trading market mechanism and supportive price signals.

The "10 million tonnes" target is a pragmatic goal that takes into account current CCS and CCUS technological conditions, costs, industry development stage and market demand. With policy support and sustained enterprise efforts, the existing challenges in CCUS development are expected to be gradually resolved over time.

In addition, the plan introduces many new directions for the industry's transformation, such as full-scenario integrated development of oil and gas with new energy and associated resources, and upgrading oil and gas infrastructure to facilitate the growth of green hydrogen, new underground energy storage, and other emerging industries. These deployments will also open up substantial new incremental markets for the oil and gas sector.